Category: Loon

Alphabet’s latest X graduate Loon has added industry heavyweights to its advisory board as the business searches for commercial credibility in the world of connectivity.

As the ludicrous dream starts to become a reality, Loon has added three industry veterans to its ranks. Former McCaw Communications CEO Craig McCaw, Evernote CEO Ian Small and Verizon EVP Global Media & New Business Marni Walden will all be added to the roster, bringing with them years of experience and, perhaps more importantly, connections in the telco space.

“As Loon transitions to a commercial business and looks to partner with MNOs worldwide, we’re adding some serious expertise to our ranks with a new Advisory Board that brings together top wireless innovators with decades of experience in the industry,” Loon CEO Alastair Westgarth wrote in a blog post.

For those who have missed out on this blue-sky thinking idea, Loon is Alphabet’s latest attempt to branch into the connectivity segment. Previous efforts might have been a flop, just have a look at the success brought through Google Fiber, but this is something slightly different; its attempting to create a new segment rather than steal business from established players.

By floating these massive balloons 18-23km above the earth for periods of up to 100 days, the Loon team claims each balloon can create a connectivity cone with coverage to a ground area 80km in diameter. The balloons are fitted with a broad-coverage LTE base station and a high-speed directional link used to connect between balloons and back down to the internet infrastructure on the ground.

In an industry which has constantly struggled to bridge the digital divide due to the expense of deploying infrastructure, this is a genuinely innovative approach to providing connectivity. It helps lessen the financial pressures of delivering the internet, adding to the connectivity mix.

Back in November at AfricaCom, Westgarth gave some insight into the business on the main conference stage. At the time he announced the beginning of a commercial relationship with Telkom Kenya, as well as outlining the wider ambitions of the business. This is an idea which has big commercial potential, most of which will be in the developing markets. These are after all areas where ARPU is low and deployment is staggered. It would appear to be the perfect mix for Loon’s proposal to bring the internet to the masses.

These appointments however perhaps suggest Loon is not a firm satisfied with the developing markets alone. These are three US executives who have considerable experience in the domestic market. Of course, there will be connections in the international space with telcos in the developing nations, but perhaps Loon has spotted an opportunity in the US. These executives would certainly help pave the way for conversations across the homeland.

Of course, this is just a theory and the PR team have been, just as you would expect, pretty evasive when asked the question. However, the digital divide is certainly a challenge in the US. For those who are lucky enough to live in the cities, they’ll have no concept of connectivity challenges, but the vast expanses and challenging terrain of the US open up numerous, huge not-spots, despite what the telcos actually tell you.

Loon has been touted as an innovation for the developing markets but seeing as the US telcos are clueless as how to solve the domestic digital divide, why not. These executives will certainly know the right people in the right places.

The idea of using balloons floating 20km above the earth to provide connectivity quite frankly sounds bat-sh*t, but Google’s Loon is actually starting to look like a feasible business.

Google is a company which certainly attracts criticism, but you cannot argue with the creativity which is nurtured. The company has a knack of taking an idea which no-one has much commercial faith in and running with it.

Take Google Maps as an excellent example. For years it was nothing more than a helpful tool for users, but now it is turning into a commercial success. And Loon might just be the next moonshot to make waves. Speaking at AfricaCom, Alastair Westgarth, CEO of Loon, gave some insight into progress being made at the business, but also some of the challenges faced when attempting to use balloons to deliver the internet to some of the worlds digital baron lands.

Loon started life as ‘Project Loon’, one of the freewheeling ideas to come out of the mysterious X labs at Google. The idea was initially conceived in 2012 as a means to connect the five billion people around the world who are still without the internet, and named so purely because of the audacity of the concept. Last year, with the team gathering pace, the ‘Project’ part of the name was dropped and the company spun out into its own separate company. Justification for the confidence came soon after, with the team signing its first commercial customer in Telecom Kenya.

“Something which we’re really excited to announce today is that we have all our necessary regulatory approval in Kenya for our operations,” said Westgarth.

“It took a long time, it took partnership with government, partnerships with regulators as well as the MNO you’re working with. As we went on that journey we’ve been working with Liquid Telecom, Nokia, working with Telecom Kenya to install ground stations to connect the balloons, and that process is almost complete. Also we’ve been making sure we have the interconnection between where the Telecom Kenya ground infrastructure is and where our ground infrastructure is, so when someone finally connects to a balloon the signal goes all the way through from our balloon to Telecom Kenya.”

What Westgarth pointed out is this is not a substitute for traditional infrastructure, but an opportunity to enhance coverage. With each balloon capable of delivering a 5000 square km cone of LTE connectivity, this is an opportunity for those countries who deal with hostile environments to deliver the internet and bridge the digital divide in areas where traditional infrastructure is a no go. Westgarth pointed out around 50-60% of the world’s land mass is yet to receive the connectivity euphoria.

With the technology and concept validated, the challenge now is to make Loon a viable business.

“As much as we want to do good things in the world, we also want to be a profitable business,” said Westgarth.

The technology has more than proved its value after launches in Peru following an earthquake which decimated Telefonica’s network, as well as Puerto Rico following Hurricane Maria. These were ventures which justified the six years of struggles attempting to keep a balloon the size of a tennis court in the air for more than a month, while also keeping it juiced up and automating the steering.

This was a challenge which took ages according to Westgarth, as engineers had to learn how to read wind forecasts, before applying that to the balloons logistics, and then automating the process. It turns out getting a balloon to stay in the same place is a tricky task, as is getting it up in the air in the first place. The engineers had to design a completely custom launch system which, again, has been automated. Then you have to figure out how to monitor the health of the asset, as well as bring it down safely, in the right place and collect all the equipment.

The issue now is on the commercial side. The team are talking to various operators around the world, with particular enthusiasm from Africa and South America, though business is being massaged as the team search for the right balance between CAPEX and OPEX investments from the operators. Right now the balloons operate on an as-a-Service model, though you have to remember this is still early days, a business which is very much taking the first steps of its journey.

The focus will continue to be on Telecom Kenya for the moment, it is important to nail the first project or the business will never be a success, though Westgarth hopes to have more customers in 2019. Africa is seemingly the best opportunity for Loon, though having done most of the testing in South America, there is interest from the operators, while certain Asian markets fit the bill as well.

The balloons are now up there, and staying up, the boring commercial side has to be figured out now. However, this is just another example of how Google’s bold and adventurous attitude can reap rewards; it’s not an accident Google is one of the most influential companies on earth. And now even 20km above it…

The Loon team have signed its first commercial deal with Telkom Kenya to deploy a pilot 4G network in suburban and rural areas of the country.

Having dropped the ‘Project’ part of the name, the Loon team now operates as an independent company within the Alphabet business, and does not look that ridiculous any more. Why didn’t anyone else figure out balloons would be an efficient means to deliver connectivity to some of the world’s more difficult not spots.

“As Loon, our mission is to connect people everywhere by inventing and integrating audacious technologies,” said Alastair Westgarth, CEO of Loon. “We couldn’t be more excited to start our journey in Kenya, and we look forward to working with mobile network partners worldwide to deliver on the promise of Loon.”

The deal with Telkom Kenya will kick off in 2019, and is being touted by the team as an alternative to the expensive job of building ground-based infrastructure. The balloons will be 60,000 feet in the air, on the edge of space, focusing on the central regions of Kenya which have been previously difficult to service, due to mountainous and inaccessible terrain. The exact coverage areas will be determined in the coming months, and subject to the requisite regulatory approvals.

“Telkom is focused on bringing innovative products and solutions to the Kenyan market,” said Telkom Kenya CEO Aldo Mareuse. “With this association with Loon, we will be partnering with a pioneer in the use of high altitude balloons to provide LTE coverage across larger areas in Kenya. We will work very hard with Loon, to deliver the first commercial mobile service, as quickly as possible, using Loon’s balloon-powered Internet in Africa.”

Alphabet is a company which certainly does specialise in absurd ideas, though this is one of the few moon-shots which looks to have genuine potential in the near future. Although it has been used to help provide connectivity in regions struck by natural disasters, this is one of the first signs of the long-term and sustainable presence of Loon. For telcos who are considering satellite as a means to tackle the rural not spots, Loon could certainly provide a more cost and time effective means to meet demand.

Back in October, Alphabet was given permission to use 30 experimental balloons to provide connectivity to Puerto Rico and the US Virgin Islands, which have been ravaged by Hurricanes Irma and Maria, leaving around 90% of the territories without coverage. While temporary coverage following natural disasters will be a continued use case for Loon, executives will certainly be comforted they don’t have to sit around and wait for a natural disaster to hit.

Alphabet is one of the internet giants which has been consistently searching for ways to diversify the business model, though this is not the first time connectivity was a major play. US telcos might have been relieved to see the end of the Google Fibre experiment, though this venture looks to be far more sustainable for Alphabet. Should the Telkom Kenya project be successful, Loon will start to attract interest around the world.